organisational agility - navigating the maze€¦ · organisational agility 3 contents ... agility...

AGILITY

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LEADERSHIP

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AGING

TECHNOLOGY

PLANNING

ORGANISATIONAL AGILITY - NavigatiNg the Maze

2 Chandler Macleod group Limited | Barometer

3Organisational agility

Contents

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exeCutive SuMMary

StruCturiNg aN agiLe OrgaNiSatiON

Why dOeS agiLity Matter?

What iS aN agiLe OrgaNiSatiON?

LeadiNg aN agiLe OrgaNiSatiON

are We aS agiLe aS We thiNk?

MaNagiNg iN aN agiLe OrgaNiSatiON

aBOut the reSearCh

the rOLe Of teChNOLOgy iN aN agiLe OrgaNiSatiON

BuiLdiNg aN agiLe WOrkfOrCe

aBOut ChaNdLer MaCLeOd grOup


executive summary.

agile organisations are those that are able to identify and adapt quickly to changing circumstances in their environment.

Over recent years, there has been a noticeable shift towards agility in the way organisations are structured, managed and led – a shift intensified by the gfC and continued market volatility.

as an environment characterised by an increased speed of change becomes the new ‘normal’, there is a widespread acceptance that organisational agility is not only a necessity for survival in the short term, but it is critical for profitability into the future.

from its position as one of the region’s largest workforce advisory and management companies, Chandler Macleod has observed the necessity for increased organisational agility across all sectors of the australian marketplace, which has been led by organisational change as well as changes in workforce demography.

during September 2011, Chandler Macleod commissioned independent research to find out how organisations viewed their level of agility and the pressures driving the need for their organisation to quickly adapt to changing external factors.

this research uncovered specific areas where organisations were already becoming more agile, the strategies they are embracing, as well as the pressures being felt in the demand to achieve an optimum level of agility.

importantly, based on the research findings, the ‘formula’ for agility has been identified against which organisations can measure their agility in the future. While this report does not apply the formula directly to the issues raised in this edition of the report, it will be measured by Chandler Macleod as part of an ongoing Workforce agility index .

the formula is stated in its most basic form as:

all aspects of the formula apply to the organisation as a whole, but are undoubtedly most influenced by the leaders in the business at all levels.

Organisational Agility Anticipation Decisiveness Flexibility Innovation


key findings ■■ It is not only possible, but essential to plan for agility. to keep an organisation focused on its strategic goals, agility must be supported by structure, infrastructure, organisational culture and management to provide the frameworks in which to operate.

■■ Agility is often a by-product of other strategic initiatives. New technology may have primary goals whose secondary benefits link to improved organisational agility, due to better access to information or increased efficiencies.

■■ There are different levels of agility and the extent to which they are utilised will vary by industry, geography and external forces. Operational, portfolio and strategic agility have different characteristics and benefits depending on the specific strategy and short and long term goals of the organisation.

■■ Operating effectively in an agile environment requires a greater focus on organisational culture, which must be driven by senior leaders. Leaders must be able to prioritise emerging opportunities without diluting focus while simultaneously fostering a culture of agile behaviour among employees.

■■ To promote employee engagement, managers require a non-traditional, more diverse skill-set that includes change management and performance management. Managers often oversimplify the need for change as being driven by a disparity between desired and actual productivity levels. the need for change goes much deeper than that for the majority of organisations, industries and sectors.

In building an agile workforce, organisations are adopting a partnership approach with key providers to manage flexible ■■

workforces. rather than a buyer-supplier relationship, a partnership approach with workforce planning and advisory experts is beneficial to manage the complexity of skills shortages and increasingly flexible workforces.

■■ Without adopting appropriate technology infrastructure and resources, other agility practices are diminished in their effectiveness and organisations risk the ability to keep pace with competition. technology is both an enabler of agility as well as a cause, but organisations are being limited by their uptake of technology measures.

given these findings, this report describes the characteristics of an agile organisation and why it matters, as well as challenging leaders to assess whether their organisation is as agile as they believe it is, or as agile as it needs to be.

With this understanding of agility, the report explores the following key areas that CeOs, managers and hr managers will need to navigate to create a more agile organisation:

Structural agility■■

Leadership agility■■

Management agility■■

Workforce agility■■

technological agility■■


What is an agile organisation?

in a world still feeling the effects of the gfC and scrambling to keep pace with the incremental speed of change, CeOs and managers overwhelmingly agree that agile organisations are best placed to survive in the short term, and prosper in the future.

95% of respondents to our survey agreed that their organisation needs to adapt to be faster and more agile to survive long term.

But what makes an agile organisation - and does this differ across industry, geography, size, maturity and culture?

the gfC shed some light on this as it was a catalyst to increased agility. Organisations that survived or thrived were those that quickly adapted to changing circumstances. agility is embodied in the ability to scan the external environment and anticipate change, making informed decisions about markets, economic trends, product opportunities and social changes. and of course, in subsequently acting to adapt products and services to suit current and future markets.1

richard Shafer, associate dean and executive director of the Center for Leadership in dynamic Organisations at Cornell university’s Johnson graduate School of Management, states in his recent hr Magazine2 article, that agile organisations thrive in times of intensely competitive, rapidly changing markets, customers, products, delivery systems and services.

according to our research, organisational structures are becoming flatter, more fluid, and more transparent. Boston Consulting group’s Creating people advantage 2010 report cites streamlined processes, flattened hierarchies and outsourced work as flexibility measures. flexible work time, job mobility and tightened hiring criteria are also key indicators of high performing agile organisations.3

private companies come out a winner in the agility stakes; research suggests privately owned companies may be better at leveraging their agility when compared with publicly listed companies. in a recent report in BrW, the top 500 private companies outperformed the all Ordinaries index by a margin of 2.4 per cent over the last decade.

according to author asher tan, ‘despite the changing complexion of the economy, small companies have been quick to adapt to the structural change, tapping new markets and outperforming their more sluggish listed counterparts.’ as an example, he cites top 500 newcomer Catch of the day as responding to consumer trends towards saving and paying down debt with its discount retail website.4

AgreeStrongly Agree

In order to survive in the long termmy organisation needs to adapt

to be faster and more agile

I think my organisation is innovativeenough to survive in a competitive

future environment

My organisation is slow to react tochanging external conditions

Disagree Strongly Disagree NA/Don’t know

0% 20% 40% 60% 80% 100%

43%

15%

7% 37% 47% 6% 3%

65% 14% 3% 3%

52% 4% 1%

An agile organisation:

- Innovates rapidly and tailors products and services to customer needs

- Shares information with suppliers and customers in unprecedented ways

- Integrates employees, contractors, customers and suppliers to share knowledge and skills.2


While general descriptions of workplace agility abound, delving deeper uncovers distinctions between different levels of agility. it’s also clear that there will be differing requirements to adapt, depending on the industry context and short and long term goals of the organisation.

Operational agilityShort term, or operational agility, focuses on growing revenues and cutting costs. Characterised by fast, effective decision making, it lets organisations reallocate resources to focus on new projects.

examples of short term agility include cost cutting, hiring freezes, and remuneration freezes. any costs that do not immediately drive the top line are cut back: ‘keep things lean and tight you will survive to fight another day.’5

the aim behind these measures is about absorbing and weathering unexpected threats by lowering costs, increasing cash on hand and leveraging tangible and intangible resources such as brand, expertise and technology.6

however, relying on cutback measures alone can be ineffective, eroding employee engagement and morale and effectively acting as a barrier to building a lean, flexible organisation. rather, a selective, balanced approach with increased flexibility measures, performance management and streamlined processes are more effective over the long term.3

portfolio agilityportfolio, or trading, agility involves reallocating resources from underperforming areas into new products or existing business units. reallocation of resources may include cash, technical expertise and employees to achieve a workforce with increased mobility, both geographically and across business units.

for example, companies such as hSBC and Mars invest heavily in developing their general managers by giving them pL responsibility early in their professional development, rotating them through functions and markets, and offering leadership training. these companies can then redeploy their managers to emerging opportunities, particularly when all aspects of the agility formula are required – anticipation, decisiveness, flexibility and innovation.7

portfolio agility also includes repackaging existing products and services to reach new customers. for example, during the gfC, virgin atlantic’s premium economy was promoted to a new market—business executives who no longer used business class travel on rival carriers.5

Strategic agilitythe highest level of agility, known as strategic agility, involves the ability to seize significant opportunities such as entering a new market or capitalising on new technology. an organisation with true strategic ability has the ability to reposition its customer value proposition in order to drive success in a changed world.5

donald Sull, in his article Competing through organizational agility suggests significant opportunities include major acquisitions, transformational mergers, entering booming markets such as China or india, the launch of a breakthrough product (such as the iphone), or securing favourable assets during an economic crisis.

as these golden opportunities can be rare, Sull says that a combination of patience and boldness is crucial. agile organisations need to stay in the game, mitigate risk and have the funds to bolster their balance sheets to invest in new opportunities.7

Organistions that may be judged historically as having ‘missed the boat’ through either a lack of strategic agility or foresight include Nokia, kodak and potentially general Motors.


No one size fits all approach? Organisations should not simply aim for strategic agility if it is not in line with organisational goals or the specific demands of their industry.

this was the case for our survey participants who work in the government sector; they were the least likely to agree that there is a need for their organisation to adapt to be faster and more agile (75% cf. overall 95%).

Most agility commentators agree that a combination of operational, portfolio and strategic agility measures are likely to be the most effective, where new opportunities can be seized at the same time as minimising costs to weather unexpected threats.6 after identifying a need for change in 2001, Cisco Systems was able to not only refocus its product range and cut costs, but also change its management approach to be a more democratic and responsive organisation.5

in order to determine and deploy the most appropriate level of agility and flexibility measures, organisations must have a deep understanding of their key drivers influencing the need for agility.

What is an agile organisation? Continued


it is an often quoted truism that the only constant in life is change. every business leader interviewed for the Workplace agility study agreed with the statement ‘Where it used to be that a business transformation was a once in a lifetime event, prompted by a rare, short-lived disruption, it is now a continuous process.’

New challenges are facing economies and labour markets; globalisation, demographic evolution, sectoral and it shifts, and consumer pessimism, combined with new attitudes to work mean economies across the world are experiencing deep structural shifts.8

agility is vital to not only surviving turbulent conditions, but to increasing revenue and succeeding in the long term. an organisation must be agile to adapt and respond quickly to both challenges and opportunities.

Challenges such as ongoing market volatility, erosion of client trust, regulatory change and competitive intensity all represent risks where organisations need to be agile to quickly respond.

however, agility is not simply a survival reflex, as it is also a precursor to opportunities for growth: new client pools, cross selling to existing clients, product diversification and an aging population all present prospects for organisations to proactively create value and successfully deliver on priorities.9

according to our research, senior business leaders cited the following factors as key drivers of agility:

investment in infrastructure■■

a response to corporate strategy■■

Macro trends in the market■■

Launch of new products and new markets.■■

invest or stagnate Change is not only driving organisational survival, but is also often a by-product of initiatives to build new bases of competitive advantage.8

an investment in infrastructure, such as a new it platform, is one of the main reasons identified for ongoing structural change. agility is not the core goal of the technology, but is often an outcome. the aim of implementing a new platform that improves the volume, quality, speed or distribution of information may be to increase cross-selling and up-selling opportunities, but a flow on effect is the ability to better monitor and capitalise on customer purchase trends.

Customer satisfaction as key Consumers are increasingly demanding that organisations employ strategies to maintain a high focus on customer satisfaction – an outcome every organisation is chasing in an age where consumer behaviour is being influenced by uncertainty about economic conditions, and market trends such as the increased uptake of technology.

a prime and topical example of this is the fact that consumers increasingly prefer to source information, communicate and make purchases online. and thanks to easy access to a wide range of international retailers, they can easily conduct price comparisons and leverage off the strong australian dollar.

in both business-to-business and business-to-consumer sectors, customers and clients are increasingly demanding shorter timelines and more customised products and services. 69% of our respondents recognise the challenges in responding to changing consumer behaviour, noting that it is now more difficult to keep customers satisfied.

Why does agility matter?

Research points to organisations devoting significant resources to upgrading their technology – it is clear that business leaders believe organisations that fail to adopt new technology risk becoming irrelevant in a fast moving environment.


increasing macroeconomic pressures Our research identified five key macroeconomic factors currently creating pressure for organisations to become more agile.

uncertainty in economic conditions was identified by 89% of respondents as a key factor. With economic cycles becoming more volatile, a constant tension between job creation and job destruction exists. flexibility around employment of labour can help to minimise fluctuations between peaks and troughs of demand – research shows that organisations that strategically combine internal flexibility with the use of contractors, outsourced and agency work appear to be best placed to manage increased volatility and to react to market changes.8

an increasing pressure for 88% of people surveyed was the costs of doing business in australia, as mining exports are likely to keep the australian dollar strong for the foreseeable future.

Slight increaseLarge increase

Clients or customers requestingshorter timeframes for delivery

Difficulty in keepingcustomers satisfied

Clients or customers requestinghighly customised products /

services

No change Decrease NA/Don’t know

0% 20% 40% 60% 80% 100%

32%

25%

22% 47% 27% 2%

45% 25% 4%

45% 19% 4%


Uncertainty in economic conditions

Changes in legislation

Costs of doing business in Australia

Competition from Australiaor overseas

Technology improvements that allow you to do business more efficiently


0% 20% 40% 60% 80% 100%

49%

40%

30%

42%

33% 34% 26% 5%2

42% 14%

55% 12% 1%2

48% 7% 5%

8% 2%

2%

40%

Why does agility matter? Continued


it’s also likely that these costs are having an impact on the level of competition – a large segment of our respondents (26%) saw no change in competition from australia or overseas.

as previously mentioned, technological improvements are an increasing driver of organisational agility (85%). technology is changing the range of tools available for organisations to do business, and has caused a redefinition of many job roles, requiring agile organisations to search for new skills, and to develop existing staff to respond to broader job descriptions.

Changes in legislation has created pressure for many organisations to adopt new processes and accountability measures to keep pace with the transparency required by government and consumer groups. this has also had an impact on the competencies required by managers in an increasingly complex legislative landscape – predominantly in areas of the environment, land ownership, safety and industrial relations.

Many of these macroeconomic conditions are having a significant impact on specific industries. perceived government fragility and controversial new taxes are particularly affecting the mining and energy sector, while the strength of the australian dollar is affecting manufacturing, tourism exports and agriculture. retail is being affected by customers favouring saving over spending and changes in behaviour facilitated by technological improvements.

Many organisations are watching revenue declining faster than costs, leading to reduced margins and return on equity. agility is required to reduce fixed costs and at the same time increase flexibility in order to scale operations up and down with demand more quickly. as a result, there has been a resurgence in initiatives such as outsourcing, as organisations seek to move from fixed to variable costs.9

New products, new marketsWith the emergence of the global consumer and an aging australian population, traditional demographic segmentation is becoming less relevant.

Baby boomers now make up one quarter of the nation but own half its wealth. as they approach retirement, they are looking for new products to increase and protect their income. agile organisations are changing the way they segment their customers – instead of age or income, companies such as Citigroup are responding to changing needs by segmenting their customers in terms of attitudes and behaviours.10

in addition to rethinking staid demographic segmentation, diversification is an established way for organisations to grow and protect revenues. a study conducted at the Massachusetts institute of technology says that agile organisations grow revenue 37% faster and generate 30% higher profits than non-agile companies.11

key to this is maintaining a flexible workforce, offering benefits in both strategy and execution – for example allowing organisations to move quickly into a new market or shut down an underperforming product line.3

there are four options for organisations reviewing their product and market alignment: new products to new markets; new products to existing markets; existing products to new markets and existing products to existing markets.

Of these options, surprisingly few survey participants are focussing on reallocating resources from underperforming portfolios to new products in new markets. this reluctance to change may be indicative of a perception seen in other parts of the survey data that suggest that, while the gfC certainly changed the mindset of businesses leaders, it did not affect the behavioural change required to be truly agile. this may be due to risk aversion or a conservative focus on protecting existing markets.

kpMg reported in The Agile Asset Manager. ‘There is a tremendous opportunity in terms of existing clients as well as new money, new clients, new markets and new products. Pursuing too many opportunities at once presents a range of risks. Choices will need to be made.’9 it is a sage reminder of the experience that Steve Jobs had when returning to apple after his years in exile. he returned to a company with dozens of projects on the go. realising that they were trying to do too much and were losing focus, Jobs cut the projects to a handful so that the best resources could be deployed on the most critical projects, as opposed to being spread across disparate projects with unclear objectives and timelines.


amongst our survey respondents, rather than looking to break into new markets with new products, organisations are instead choosing to break into new markets with existing products or to offer new, related products to their existing markets.

With many organisations broadening their service offerings to include ‘specialist’ areas or new services resulting from new technology applications, there has been a blurring of industry boundaries, exposing many to a new set of competitors. today, organisations must be agile enough to compete with both small, niche players and large, organisations with a broad offering.

Workforce demography shiftsChanges in the demographics of australia’s population are naturally reflected in the changes affecting the makeup of today’s workforce.

While a significant proportion of the workforce is aging, gen y now represents the largest segment of the workforce. the demands of workers at both ends of the spectrum are influencing how organisations try to reduce staff turnover by offering more flexible job roles and encouraging internal transfers.

for the aging workforce, traditional, full time employment is less relevant. as family and financial obligations decrease, the aging workforce is becoming more open to flexible employment.

gen y workers in the labour market are also demanding changes to the structure of job roles. Naturally suited to working in more agile organisations, gen y workers actively seek diversity in their career, are more accepting of change and understand and are comfortable with new technology.

Organisations looking to gain a competitive edge through technology will need to be agile enough to provide flexible working conditions to attract and retain younger employees—digital natives who grew up with social media and web 2.0.

What many survey respondents have either ignored or not fully understood, is that in 2014 we will see a dramatic shift in the workplace with the potential for five different demographic groups in the workplace: traditionalists, baby boomers, gen x, gen y and the latest addition, Millennials. this will bring with it five different sets of expectations that only an agile organisation will be able to turn to its advantage. Other less agile organisations will no doubt be caught up in a generational tsunami of mixed expectations, values and personalities.

While CeOs may recognise that agility is key to attracting skilled workers, minimising the risks of a volatile market and capitalising on new opportunities, many organisations may not be as agile as they would like, or need, to be.

‘More and more people are moving towards the portfolio type of career approach. Particularly as people get older and they’ve passed the heavy mortgage and school fees era, they want more flexibility.’

CEO, Chandler Macleod Group client.

‘When you look at the age of the population and the types of things that employers are looking for, they really need to start to adjust who their target employee groups are. Otherwise they won’t be able to pick up the talent that they need to move forward. Everybody’s going to compete for the youth [labour] market.’


Why does agility matter? Continued


While most senior executives have an appreciation of ‘adapt or survive’, at least on a theoretical level, fewer are actually applying this to business. Making informed assessments and projections about markets, economic trends, product opportunities, demographics and social changes is one thing; putting strategy behind these predictions and acting on that strategy is quite another.

the vast majority (95%) of respondents to our survey agree that their organisations need to be faster and more agile in order to survive in the longer term. this view was most strongly held by senior management and hr management (both 98%); less so for those in non-management positions (80%).

But while three quarters of the managers responding to our survey believe that their organisation had become faster and more agile over the last 5 years, another 12% believe the opposite – that their organisations had in fact become slower and less agile since the gfC.

this was particularly true of organisations with more than 500 employees, perhaps putting credence to the adage ‘the bigger they are, the slower they move’. respondents from these large organisations were the least likely to agree that their organisations had become faster and more agile, and accordingly were the most likely to agree that their organisations were too slow to react to changing external conditions (58%, as compared to 34% of those in medium-sized businesses). further, this group were the least likely to agree that their organisations were innovative enough to survive the competitive future environment.

On this latter point, most respondents were overwhelmingly positive, with four in five agreeing that their organisations possessed sufficient innovation to survive a competitive and dynamic future environment. their confidence is in contrast with the findings of the most recent World economic forum global Competitiveness report: ‘australia still lags behind the top performers of the global Competitive index when it comes to innovation (22nd) and business sophistication (29th), two critical drivers of competitiveness for advanced economies.’12

this leads to a significant conundrum in that the australian companies surveyed believe they have ‘the right stuff’ yet independent global assessment suggests that perhaps what australian companies believe is sufficient, is in fact deficient. this links with the observation that has been made in many forums of late that suggest the minimal relative impact of the first gfC on australia has perhaps given the country a laissez-faire approach to real agility and the need for fundamental change in the way we approach workforce management.

are we as agile as we think?

0% 20% 40% 60% 80% 100%

A little faster and more agileMuch faster and more agile No Change Slower and less agile Don’t know

17% 58% 11% 12% 1%

Industry Insight

Mining and Energy respondents were the least likely to describe their organisations as increasing in agility since the GFC, with 59% of respondents reporting that their organisations had become faster and more agile as compared to an average of 75% for all other industries.

Interestingly, respondents from the Banking and Financial Services sector were the most likely to agree that their organisations were too slow to react to changing external conditions (62% as compared to an average of 44% for all other industries).


this confidence among our respondents extends to skills forecasting, with only a third believing it is hard to predict the skills required in the next 12 months:

this result may be a reflection of the proportion of respondents who represent industries less reliant on technology such as manufacturing and mining, where the lead times for major technological advancement are significantly higher than industries such as iCt or telecommunications. an article in the australian in May 2011 would suggest that in iCt, skills forecasting is significantly more challenging:

‘Not enough has been done to prepare our nation for the digital age… The rapidity of change in hi-tech can surprise even experts. The rapid pace of technological change, the growing role of ICT as an enabling platform for all other industry sectors (contributing 5% of GDP and GVA and growing), and the demands of major infrastructure projects like the NBN and e-Health initiatives are all exacerbating ICT skills shortages. This makes skill foresighting – our ability to predict the future skills needs of industry - more important than ever. We know we need more tech workers, and we need to improve prediction of workforce needs and capabilities’.13

further, while skills forecasting may be commonplace in industries with significant project portfolios and clear peaks and troughs in demand (such as construction), for organisations without this level of transparency, the prediction of required skills – even 12 months into the future – is often based on ‘gut feel’:

industry regulation, variable economic cycles, increased customer transience and reliance on global markets or funding also impact a senior manager’s confidence in being able to accurately predict the skills requirements of the future. respondents from the banking and finance industry were the most likely to agree that is it hard to predict what skills staff will need 12 months from now.

Obviously, the ability to identify and access unique or emerging skills-sets quickly has a significant impact on an organisation’s agility.

the confidence of our respondents in their own organisations’ ability to mobilise quickly in response to external forces (44% of respondents believed their organisations were slow to react to the changing external conditions), is mirrored in other studies on organisational agility. in Mckinsey’s 2006 Global Survey on Nimble Organisations, 49% of respondents believed their own organisations were more agile than their competitors, with a further 2 in 5 feeling confident that their own organisations were competitively superior regarding speed of response and decision-making. interestingly, it was board members and C-Suite managers who rated their own organisations agility compared to competitors, most highly.14

0% 20% 40% 60% 80% 100%

AgreeStrongly agree Disagree Strongly disagree NA / Don’t know

5% 28% 56% 8% 2%

It is hard to predictwhat skills staff will

need 12 monthsfrom now

There’s some skills that I question whether they are nice to have as opposed to generating the income we need.’ CEO, Chandler Macleod Group client.

are we as agile as we think? Continued


Similarly, kpMg’s 2011 Agile Asset Manager study revealed a strong tendency among the C-Suite interviewees to regard their organisations level of agility as above the norm for their industry.9

respondents to our survey were also optimistic about their staff’s ability to survive changes, with 62% believing that their staff had the skills and experience to navigate successfully through change. if this is correct, australian organisations are well placed to mitigate one of the most significant identified barriers to agility: staff resistance to change, which respondents placed on equal footing with skills shortages and government intervention in terms of their ability to hamper improved organisational agility.

regardless of our perceived vs. actual agility, it is clear that in order to be agile, organisations need to take into consideration the agility profile of their people and culture, their infrastructure and technology, their business processes, and to work within an organisational structure which promotes systemic agility.

Too much agility?

While increased agility was a strategic imperative to our respondents, too much agility can be detrimental to competitiveness and sustainability.

‘Hyper-agility’ is widely regarded as undesirable due to ‘fears over a loss of control, the costs to achieve [this state] outweighing the benefits, and the belief that operating continuously at full throttle is unsustainable’.

1. do you experience skill shortages?

2. do you have surplus employees with inappropriate skills?

3. do you have difficulty in attracting or retaining talent for critical positions?

4. do you have financial and human resource capabilities available to take advantage of new opportunities?

5. is a high proportion of your budget comprised of human resources related costs?

iS yOur OrgaNiSatiON aS agiLe aS yOu thiNk?


‘Structure’ and ‘agility’ may seem like opposing concepts but in fact, all agile organisations are underpinned by carefully planned organisational structures in line with long and short term strategic goals. indeed, ‘for agility to prosper it needs some degree of structure, infrastructure and management to set the boundaries and framework within which to operate. Without this, the business risks a lack of visibility and control, dilution of focus and potentially the development of silos.’9

however, the balance between adequate structure and control to mitigate risk, and flexibility to respond quickly to market forces and opportunities, is a significant challenge for many business leaders. 21% of the barriers to agility identified by our respondents were related to organisational structure (rule / bureaucracy, size of organisation, control from parent company, corporate governance and structure). But while it is acknowledged that factors such as scale, complexity, diversity of product and geography, ownership structure and corporate history are all significant influencing factors on an organisation’s agility, these aspects do not have to be constraints or barriers – ‘an appropriate organisational structure and governance framework can often be the differentiator between an agile and fragile organisation’.9

One potential avenue for exploration by companies seeking to create greater agility is to look closely at their organisational structures to see if they help or hinder true agility. agility can be created or maintained through restructuring based on the dynamics of the market, revenue generation, cost management and employee engagement. all business leaders interviewed for this study had been going through changes in organisational structure, and while details varied by organisation, there were some common themes:

to encourage more efficient use of resources (cost cutting)■■

to increase sales opportunities across business units (revenue growth)■■

to meet strategic objectives (such as focus on customer satisfaction).■■

the difference is that in the past, the level of organisational transformation required to respond to these priorities was undertaken in line with specific milestones or major events only, it is now an almost continuous process.

Certainly 100% of the business leaders we interviewed believe that business transformation is no longer a once-in-a-lifetime event, but a continuous process. Organisational transformation may be prompted by:

a desire to leverage a large investment in infrastructure, such as a new it system■■

economic volatility, particularly with respect to access to global funding or the expenses associated with operating globally with a ■■

strong australian dollar

Workforce supply risks caused by arduous industrial relations arrangements and persistent skill shortages■■

product innovation – either consumer demand driven or technology driven■■

Shift in strategic focus.■■

What then, is the ideal structure of an agile organisation? according to our survey respondents, agile organisational structures are generally becoming:

flatter■■

More fluid, with employees who are more flexible and mobile, who move across silos and ■■

who co-operate with other business units

More transparent in order to facilitate communication and speed of decision making■■

More matrix driven (i.e. structure reflects both operational and functional organisation, ■■

with cross-functional process owners and teams).

Structuring an agile organisation.

Agility can be achieved by making organisation structures:

- Flatter

- More fluid

- More transparent

- More matrix driven.


this is underpinned by strong core business processes enabling greater efficiency, transparency and alignment of stakeholders, without unnecessary complexity or bureaucracy. tactics used by our respondents to facilitate an agile organisational structure include:

the use of in-house champions to drive change across the organisation (73%)■■

the autonomy and responsibility held by employees across the organisation (63%)■■

the creation of virtual or temporary teams for specific project needs (60%).■■

these latter points reflect the need for appropriate job design at all levels of a flattening organisation. Without clarity around job design, it becomes impossible to balance core business competency and regulatory requirements, risk-taking, decision-making boundaries, and skills analysis with flexibility in work arrangements, use of technology, product and service innovations, desire for variety, and use of external parties such as contractors, outsourcing and flexible staffing. ‘Multiple layers of management that separate people from information, customers, and the ability to make knowledgeable decisions won’t work in your agile future. Neither will people who want to do one job, make limited decisions, take no risks, and pass each challenge to their supervisor.’2

Our respondents indicated a strong and increasing demand for employees who have the flexibility to work for a variety of departments, and a belief that such internal mobility is a key characteristic of organisations who are sufficiently agile and innovative to survive in a competitive future environment. employees who are in an organisation that encourages internal transfer of employees (83%) are more likely to agree that their organisation is innovative enough to survive in a competitive future environment (cf. internal transfer not encouraged 69%). in addition, they (41%) are less likely to agree that their

organisation is slow to react to changing external conditions (cf. internal transfer not encouraged 60%). there is a structural caution in this message – ‘in many organisations, existing hr systems are major impediments to creating agile workforces. for the most part, hr systems are designed to reduce variability and to standardise behaviour, not to promote flexibility and adaptive behaviour.’2

But in an economy characterised by intense competition for skills (skill / labour shortage and competition for employees from other companies was rated by respondents as a key barrier to agility), structuring for internal mobility is not enough. flexible resourcing models such as the use of contractors and consultants are increasingly being used to quickly scale up and down as demands (and costs) dictate. a word of caution though: these models should be guided by a workforce management plan aligned with an organisation’s business strategy.

‘Increasingly, we’re moving people who we regard as having potential into other business functions to give them some exposure to that and also to create some variety’


Industry Insight:

Respondents in the healthcare (92%) and supply chain industry (84%) are the most likely to agree that internal employee transfers are encouraged in their organisation. In comparison, those working in banking and finance (62%), HR (62%), or for the government (63%) are the least likely to agree with this (cf. overall average 75%).

0% 20% 40% 60% 80% 100%

AgreeStrongly agree Disagree Strongly disagree NA / Don’t know

12% 57% 26% 4%

There is an increasingdemand for staff who have

the flexibility to work fora variety of departments


Our respondents indicated an increase in the use of external personnel such as contractors (61%) and consultants (45%). those working in an organisation with less than 50 employees were the most likely to have seen an increased use of consultants (55%; cf. 50-500 employees 44%, more than 500 employees 43%), while those in the mining and energy and manufacturing industries are the most likely to have increased the use of contractors (73% & 72% respectively; cf. overall average 61%) and consultants (59% & 50% respectively; cf. overall average 45%).

More than half (52%) also agreed that there had been an increase in the amount of outsourced work.

those in senior management were the most likely to agree that there had ■■

been an increased amount of outsourced work (60%; cf. hr management 30%, other management 55%, non management 40%).

those working in banking and financial services (62%), mining and resources (61%) and sales and marketing (60%) were the most ■■

likely to agree that there had been an increase in work outsourced (cf. overall average 52%).

this increase in outsourcing may be driven by several factors:

Cost savings, particularly where outsourcing involves off-shoring (e.g. it to india)■■

inability to source the relevant skills internally■■

to maintain focus on core competencies.■■

according to the recent Boston Consulting group / Ciett report on private employment Services ability to assist organisations in adapting to change, ‘Research shows that those organisations which strategically combine internal flexibility with the use of agency work to address fluctuations in demand appear to be best placed to manage increasing volatility and react to market opportunities.’8 this assertion is echoed by the australian human resources institute in their 2010 research paper, Creating people advantage, ‘Building flexibility into the strategic workforce plan is critical to success in a volatile world,’ and ‘Flexibility enables agility in both strategy and execution – for example, allowing companies to move quickly into a new market or shut down an underperforming product line.’3


The use of contractors

The use of consultants

The amount of work thatis outsourced


0% 20% 40% 60% 80% 100%

18%

14%

10% 35% 34% 16% 6%

37% 31% 14% 4%

43% 25% 11% 3%

[With outsourcing] ‘You are dependent on people who aren’t part of your organisation to deliver stuff. To me that’s really big change.’

Senior Manager, Chandler Macleod Group client.

Structuring an agile organisation Continued


in this new economy, new approaches to managing flexible staffing relationships is needed; traditional approaches are less likely to facilitate the true agility benefits that many organisations seek. according to kpMg’s Agile Asset Manager Report, those outsourcing relationships that work most effectively ‘have a partnership base approach rather than a buyer-supplier relationship.’9

ultimately, there is no universal template for an organisational structure that maximises agility. however, approaching the now-continuous task of structural review with:

a strong core of well-thought-out business processes that provides enduring rigour, balanced with the ability to adapt■■

aligning the business and employee strategies to anticipate and mitigate emerging risks■■

a flat structure which enables transparent and rapid communication, encourages internal mobility, and is underpinned by solid job ■■

design

a partnership approach to flexible resources to achieve flexibility in availability (and scalability) of skills via consultants, contractors, ■■

and outsourcing can enhance an organisation’s ability to quickly respond to (and create) market forces without diluting the long-term organisational strategy. the key is in ensuring the structure supports the business and not just individuals within the business. and to do this, requires strong, strategic, and agile leadership.

1. is your leadership team in agreement about the structure it needs to be agile?

2. is there a mindset of readiness for change?

3. is your organisation structured around roles, or individuals?

4. do you know which employees have the skills to adapt to new roles?

5. are changes communicated clearly across the organisation?

dOeS yOur OrgaNiSatiON have aN agiLe StruCture?


in any organisation, regardless of industry or geography, the goal is not necessarily agility itself; rather agility as a means of achieving a primary goal, such as:

increased customer satisfaction■■

Creation of a new uSp supported by technology■■

a desire to increase the breadth of the product or services offering■■

a requirement for faster or improved customer metrics■■

greater cooperation or cross-selling between business silos.■■

regardless of the primary motivation, it is clear that organisational agility is led from the top and that leading an agile organisation requires new skills and characteristics that more traditional models of leadership are unlikely to provide. indeed, ‘leadership has a key role in creating, deploying and cascading agility down through the business for the benefit of clients and the organisation.’9

equally, ‘senior management / leadership issues (for example inability, lack of interest)’ was cited by 12% of our respondents as the primary barrier to their organisation becoming more agile, ahead of cost (11%), red tape (10%) and staff quality / training and development (10%).

top 10 challenges to becoming more agile and responsive:

1. Senior management / leadership issues (inability, lack of interest)

2. funding / budget / cost

3. rules / bureaucracy / red tape

4. Skills base / staff quality / training & development

5. Skills or labour shortage / competition for staff from other companies

6. Staff resistant to change

7. government intervention / legislation

8. Culture

9. difficulty finding or keeping up with appropriate technology

10. economy / market condition

the challenge faced by most senior leaders in today’s economy is how to prioritise emerging opportunities without diluting focus and strategic thinking, while at the same time, creating a culture in which agile behaviour is encouraged and rewarded, without exposing the business to unnecessary risk. this requires the leader to display a set of characteristics that are well beyond the fundamentals of operational management:

ambiguity tolerance ■■ Curiosity Creativity

Courage ■■ Conviction emotional resilience

Critical thinking ■■ vision flexibility15

interestingly, respondents to iBM’s 2010 global Chief executive Officer study rated creativity as the most important leadership quality in a volatile environment. this was due to the close links between creativity and comfort with ambiguity, preparedness for experimentation, disruptive innovation and balance risk-taking.

Well-known leaders of agile organisations (richard Branson, Steve Jobs) embody many (if not all) these qualities, and look for similar characteristics when bringing new talent and capabilities into their organisations. in doing so, many CeOs actively seek to introduce individuals who will challenge the status quo and provide new perspectives; essential to fostering an agile approach and ultimately, creating a culture of agility.

ensuring that all employees clearly understand and can embody the desired organisational culture is critical to agility. Culture begins with leadership behaviours, values and clarity, and continuity of organisational priorities. it is entrenched using structure, process and systems, appropriate hiring for cultural fit, and reinforced through incentives. it provides a framework for what is and is not negotiable – ‘the way we do things around here.’ in the words of one CeO interviewed for kpMg’s Agile Asset Manager report ‘agility comes from cultural continuity and building a franchise and framework to deliver over the long-term’.9 in an agile organisation, leaders must be able to empower individuals.

Leading an agile organisation.

‘This CEO of the last 5 years, his number one refocus of the organisation has been to change everybody’s view to the customers, to customer satisfaction and to drive a culture that’s based on (customers) and it’s so embedded that it’s not even funny. Everything we do from our Monday morning meetings to Friday morning wrap up across the organisation, no matter how senior or junior your team is, focuses on what are the five things that we’re going to do to strengthen our relationships. His drive to get there you could say is a form of agility and it’s played out in the way we live and breathe it.’

Senior Manager, Chandler Macleod Group customer.


to drive a culture of organisational agility, it is important the CeO becomes more accessible, more able to reinforce the appropriate strategies to employees at all levels. agile leaders should be open-minded and inventive in their communication styles, in order to engage with a new generation of employees, partners and customers. Many agile organisations are using technology as a conduit for increased CeO accessibility and regular, direct contact, whether through blogs, social media, live broadcasts. the use of technology to facilitate communication and decision making was cited extensively by respondents to our research (81%), and is particularly useful in agile organisational structures where employees are working in temporary or virtual project teams, in disbursed geographies, or under an outsourcing arrangement.

in addition to the most powerful leadership symbol of modelling the agility required of the business through their own actions, one of the most important roles a leader can play in enabling a culture of agility is in aligning performance and reward with the strategy, priorities and value drivers of the organisation: ‘CEOs are increasingly recognising the importance of creating specific measures and incentives around agility, responsiveness and proactivity’9. employees will behave in a way equal to how they are incentivised; and the inherent risk-taking associated with much organisational agility requires employees to operate outside of their comfort zone.

another significant barrier to organisational agility lies in the propensity of the senior leaders to engage in strategic risk-taking. Leaders of agile organisations must possess a level of fearlessness, tempered by ethical and responsible decision-making. effective governance structures to enable quick movement without unnecessary risk are key, however the appropriate balance is often hard-wired into the psyche of the leader (and is therefore possible to assess via objective psychometric assessments). in the words of Sir richard Branson: ‘if you are a risk taker, the art is to protect the downside.’

But there is no point in nurturing and harnessing agility throughout an organisation if it is not effectively deployed. Leading an agile organisation requires the ability to identify agility requirements and focus them effectively in line with strategic objectives – including an understanding of when to pull back. ‘CeOs will need to draw on agility strategically and tactically and use it in different ways at different points in the cycle, whether it be reacting to specific issues and challenges or to capture opportunities to improve both short and long-term performance.’

in this, the senior leaders require the support of the organisational management team.

‘What his (the CEO) decisions have led to, the way he holds himself, the way he’s hired people, they way he’s fired people, all of these symbols have really taken on the culture of the organisation. It’s not just a figurehead. That’s serious management of what he stands for and the organisation really follows it.’


‘Effective leaders have a capacity to marshal the intellectual, emotional and behavioural energies of the company to breakthrough… the essence of effective strategy is re-positioning breakthroughs and melding them together with a platform of operational excellence.’15

1. do you use a variety of assessment methods to select leaders, or simply rely on interviews and networks?

2. how well do you define what is critical for success in the role, and have board members agreed to these expectations?

3. do you measure critical behavioural competencies in a way that can be observed?

4. do you utilise objective testing methods to assess the underlying attributes of a person?

5. do you review past performance in the context of the goals and constraints of the previous position and organisation?

fiNdiNg the right LeaderS


an agile organisation requires staff who are more flexible and mobile, who move across silos and who cooperate with other business units.

this has several implications for managers:

Specific training becomes essential to ensure that employees have a thorough understanding of the business unit processes and ■■

strategies

Measuring rOi becomes more important. Managers need to ensure that new skills have a positive impact on the bottom line; some ■■

new skills may be a ‘nice to have’, rather than truly adding value

Constant review and tracking of talent movement is necessary to understand the supply of and demand for different skills■■

a large and diverse organisation may experience some ‘cultural clash’ when people from different business units are brought together ■■

to solve a problem. Managing the culture of new teams and virtual and temporary project teams is increasingly important.

With Leadership/Staff Management and Culture cited in our survey as two of the key barriers to becoming more agile, the pivotal role managers’ play in equipping an organisation to adapt and respond to change is clear.

Managing workplace culture has become a more important part of their role over the past two years for 84% of our respondents, with a number of cultural changes occurring in the workplace. Staff are being encouraged to look for opportunities to make changes and innovate (82%), creating a culture that supports open performance conversations (70%), and encouraging internal transfers to ensure skills are deployed where they need to be (82%).

Managing in an agile organisation.

ARe TheRe ANY OTheR WAYS IN WhIch ORGANISATIONAL AGILITY ImpAcTS mANAGING STAff ANd WORkpLAce cuLTuRe?

Leadership / Staff management 7%

Culture 6%

Stress / frustration / Negative sentiments 5%

Motivation / proactivity / positive sentiments 5%

Communication 4%

retention 3%

training 3%

Skills 2%

resistance to change 2%

Staff benefits 2%

process (e.g. planning, implementation, etc.) 1%

Measurement 1%

reward / remuneration / recognition 1%

Other 10%

None / don't know 53%


increased regulation is changing the profile of a modern manager, reducing the number of workers promoted into managerial roles and impacting on the level of skill and knowledge that managers are required to possess. Specific regulatory pressures differ by industry and organisation, however there is a common theme that the regulatory environment is becoming increasingly complex.

in an agile organisation, business unit leaders must have a more diverse skill-set, encompassing technical skills as well as skills in change management, staff management and communication. furthermore, they must have the skills to effectively monitor threats and opportunities in the external environment and strengths and weaknesses within the organisation, to determine whether a need for change exists. according to our research, these factors have led to a tendency to hire managers with tertiary qualifications, at the expense of those who have ‘risen up through the ranks’.

Managing resistance to changepeople do not fear change, they fear loss – whether it is a loss of freedom, certainty, autonomy, comfort or another factor. While change is inevitable in today’s business environment, often employees will still resist it due to this impending sense of ‘loss’ although they may not be able to fully articulate it.

understanding employees’ position on change, and understanding what it is that they fear losing, helps managers to flow through the implementation process more effectively.

‘At our exec level we talk a lot about talent movement across [our organisation] and the agility is really reflected in individuals and the skills that they are bringing across from business to business, so we’re constantly tracking who’s moving, who needs to move, where we’re missing talent, what we need in terms of ‘is it execution?’ is it strategic thought?, is it growing talent’’… those are the leadership capabilities that we’re looking at. We’re measuring that quite regularly. We’re looking at talent reviews and talent succession plan to make sure the agility exists.’

Chandler Macleod Group Client

AgreeStrongly Agree

Managing workplace culture is amore important part of my role

than it was 2 years ago

Staff at my organisation areencouraged to look for opportunities

to make changes and innovate

Internal staff transfers areencouraged in my organisation

With shifting job roles it is harderto measure staff performance

My organisation has a culture thatencourages open performance

conversations


0% 20% 40% 60% 80% 100%

35%

14%

12%

3% 38% 55% 2%

57% 24% 5%

68% 13% 4%

49% 14% 1%

1%

16% 58% 19% 5%


Strategies used by managers to manage resistance to change range from16:

■■ communication, education – required when there is solid information to relay that will change the way employees are required to work (for example Cultural change)

■■ participation – involving potential resisters in designing the change, ensuring they develop a deeper understanding of the need for change and become more committed it (for example technology change)

Negotiation■■ – required when a group of staff / department resists change as they do not believe it benefits their team

■■ coercion – in circumstances where negotiation has failed, formal power is used by senior managers to force employees to accept change or lose rewards, or even their jobs

■■ Top management support – the visible support of top management quickly helps overcome resistance to change, as it symbolises to employees that the change is important to the organisation.

One of the most important factors in getting employees to embrace increased performance expectations and agility is a manager’s ability to drive employee engagement. in fact, organisations surveyed in a recent study conducted by the aberdeen group ranked the importance of employee engagement to improving performance at 90%.17

CeOs and senior managers must become more accessible to reinforce the organisation’s short term direction and focus, as well as the long term strategic vision, on a regular basis. as one Chandler Macleod group client pointed out, ‘If the company doesn’t paint a very clear picture of what the future looks like, people won’t want to go there.’

While blogs, social media and live broadcasts are all effective communication channels to achieve this, traditional face-to-face contact is also vital to increasing engagement – and performance.

While most senior managers believe that performance management is more difficult in an agile organisation, significant effort has been put into getting this area right. Not surprisingly, strengthening performance culture was the number one strategy identified by the aberdeen group to simultaneously improve engagement as well as performance.17

according to our research, performance management tools themselves are not changing, however where organisations are looking to become more agile, an increased focus is being put on using these tools effectively in:

■■ understanding the talent within your organisation – as the business environment changes, work with your team to ensure their individual goals and strengths are aligned with your organisation’s goals

Setting clear goals■■ – ensure your employees know what is expected of them by setting clear kpis to empower them to meet and exceed the goals set for them

■■ Learning and development – work with your team to map a pragmatic and practical learning and development plan that will enable them to keep pace with the changing business environment and continue to meet their kpis

■■ Transparent, open and honest performance conversations – it is important to encourage a culture which supports open performance conversations. this can be achieved by committing to regular feedback sessions with your team on their progress towards goals and decisively calling out unacceptable behaviour or actions

■■ Regular performance reviews – it is essential that managers undergo the appropriate training to conduct performance reviews. Where possible, use 360 degree measures, not just financial metrics

■■ communication of organisational values – increase retention through clear, regular communication of your organisation’s core values and direction.

‘Clear communication and frequent updates on issues impacting the organisation means everyone is in the loop and more able to support needed change.’

Senior Manager, Chandler Macleod Group Client

Organisations can use performance management tools more effectively to:

- Understand the talent within their organisation

- Set clear goals and KPIs

- Plan Learning and Development

- Hold transparent, open and honest performance conversations

- Deliver regular performance reviews (360 degree measures)

- Communicate organisational values.

Managing in an agile organisation Continued


More to do, in less time, with fewer peopleStaff retention and managing change resistance are just two of the increased pressures placed on managers today. three quarters of managers indicated that they are expected to produce more in a day compared to two years ago; others are working within increasingly shorter timeframes (70%) and have fewer people in their teams to execute the same amount of work (57%).

this is against the backdrop of rising staff demands – desirable benefits such as flexible work arrangements (79%) and the flexibility to work for a variety of departments (69%), highlight the importance of performance reviews to ensure both employee and employer expectations continue to be met. after all, this has a direct impact on staff happiness, and ultimately – on performance.

AgreeStrongly Agree

I am now expected to produce more in a day than was expected

of me 2 years ago

There are fewer people in my teamthan there were 2 years ago but we

are expected to do just as much work

I am under pressure to work withinshorter timeframes than 2 years ago

Disagree Strongly Disagree NA / Don’t Know

0% 20% 40% 60% 80% 100%

26%

26%

23% 33% 37% 4% 3%

43% 27% 3%

49% 22% 2%

1. do you manage contractors and consultants for project work?

2. do you review shift patterns in line with changing demand?

3. do you set clear performance benchmarks and measures for employees?

4. do you have rigorous assessment and selection processes to find the right people?

5. are you making use of available technology and equipment to support productivity?

MaNagiNg fOr iNCreaSed prOduCtivity


the success of any project depends significantly on one major factor – the people and teams that pull together to deliver value to the organisation and its customers. despite the standards, processes and technologies an organisation employs, if the group of people executing against an organisation’s vision is not performing well together as a team, agility is going to be much harder to achieve.

So, what constitutes an agile team?

fundamental is the contribution of hr managers in hiring and developing agile, nimble and resilient people; employees who are flexible and more mobile, with a diverse skill-set that can be moved across the organisation as needed to address immediate business needs.

the majority (87%) of respondents agree that it is increasingly difficult to find employees with the appropriately diverse skills. as such, agile teams are often geographically dispersed with organisations often crossing borders to attain the skills they need to meet current and future attrition. in fact, in The 2008 State of Agile Development survey, conducted by versionOne, 57% of respondents stated that their teams were distributed.18

in a rapidly changing environment, it is important to identify critical roles and adopt a long term perspective:

identify the skills required for critical roles■■

identify employees with the required skills and capacity to develop skills■■

place employees in roles which lead to critical roles.■■

By identifying future skill shortages early and working to minimise those shortages, organisations are better positioned to expand into new geographic areas or new product or service offerings that may require different skill-sets. Skills audits can assist understanding of what skills are required from the market, when, and what skills to outsource.

Often when conditions change, organisations are also faced with resource and time constraints. to generate greater productivity in this environment, a 3-phase approach is required, which was also supported in accenture’s ‘Building The Anatomy for High Performance’ research19:

Strive for operational excellence through continuous process improvement■■

Create a team that’s capable of driving rapid response (agility)■■

Shift the organisational culture to a ‘learning environment’ in which employees are encouraged to seek opportunities for individual ■■

development to attain operational excellence and agility.

finding talent with the required skill-set requires rigorous selection, testing and hiring criteria. Managers should discuss talent (including for more junior roles) at a senior level, and take responsibility for employees career paths to ensure their skills continue to be best allocated within the organisation. this approach provides employees with the opportunity to be part of cross-functional, even virtual, teams that may solve a problem or identify a new opportunity, in order to achieve operational excellence. While internal transfer of employees seems to be encouraged (82%), the shifting roles do not seem to have made performance measurement harder – only 42% say that shifting roles means more difficult performance management.

By creating clear but flexible job descriptions, employee job functions and goals can be changed regularly to support organisational needs. furthermore, by taking a job plan approach, organisations can empower employees to take charge of monitoring their core job functions and goals, providing them with the opportunity to continue to meet and exceed goals, even during periods of change.2

Building an agile workforce.


the calibre and performance of an organisation’s employees, particularly in a period of rapid growth and change, is paramount to its current and future success. according to our research, most managers are optimistic about their employees’ ability to survive changes, with 62% believing that their workforce has the requisite skills and experience to navigate successfully through change.

While only one third of respondents believe it is hard to predict the skills required in the next 12 months, finding and retaining people with a complete skill-set for managerial and technical roles proves more difficult. this has led to many new, critical roles being created (for example technologists, search strategists, data analytics) where an organisation must compete for talent with a large number of industries. this is particularly apparent for skills prevalent in younger workers (such as social media expertise), who may be hard to retain.

although 56% of respondents indicated that they have increased their focus on employees retention compared to 5 years ago, less than half (42%) have taken a long term perspective on the succession planning of critical roles.

Senior managers believe that employees motivation and retention is more challenging in an agile organisation, but that it can be achieved by:

providing diversity in work tasks and the work experience■■

having in place processes and bureaucracy that support an agile workforce■■

paying employees above market wages■■

providing employees with adequate training■■

encouraging employees to take a long term career perspective■■

knowing what employees want and giving them responsibility and recognition■■

Constantly marketing the organisation to employees.■■

AgreeStrongly Agree

Staff at my organisation have therequisite skills and experience to

navigate successfully through change

There is a lot more focus on staffretention in my organisation than

there used to be 5 years ago

My organisation has taken a longterm perspective on the succession

planning of critical roles

It is hard to predict what skills staffwill need 12 months from now


0% 20% 40% 60% 80% 100%

5%

13%

4%

5% 28% 56% 8% 3%

38% 40% 12% 6%

42% 34% 8% 3%

57% 32% 3% 2%

The resources boom has created skill shortages in key roles.

‘The Australian labour market is probably reaching a point where everybody who wants a job has one. If you’re looking for people with the skill-sets and the educational background that we look for, you’re fishing in a very small pond and everybody’s doing the same thing.’


The most common tools to secure and retain talent are:

– Ensuring the workplace culture is both productive and enjoyable (69%)

– Formal employees development (65%)

– Formal recognition of achievement (64%)

– Ensuring diversity of work tasks (45%)

– Paying higher wages than industry standard (36%)

– Non-financial employees rewards (23%)

– Delayed bonuses (20%).


however, even with the right people, without the right culture and environment, agility is hard to achieve. Clear communication of the organisation’s vision and expectations for agility is essential, and leaders should be coached to provide this in the orientation process, and thereafter. Creating an environment in which diverse ideas are encouraged is also essential. after all, intelligent risk taking and open discussion, which inevitably involves some conflict, is how some of the greatest innovations have been discovered. importantly “decision making should be pushed down, across, and throughout the organisation so people are not waiting for decisions before taking action on matters that are within their control”.2

Does your organisation:

- Hold employees accountable for their results AND behaviours?

- Provide ongoing, daily feedback to employees through a competency-based, individually planned and negotiated, results-based performance feedback system?

- Reward met/exceeded goals as well as setting consequences for unmet goals

- Make promotions on contribution / impact or longevity / /seniority

- Reward high performers at least quarterly?

- Coach managers to communicate the organisational vision?

- Provide an environment that supports diverse ideas, training and education?

(HR Magazine (Vol. 44, No. 11)

1. do you understand your organisation’s employee value proposition?

2. do you know what employees are looking for in a job?

3. have you prioritised critical competencies of job roles?

4. do you communicate quickly and clearly with the candidate about timeframes?

5. do you have significant rigour and objectivity in your selection and assessment process?

COMpetiNg fOr SCarCe eMpLOyee taLeNt tO BuiLd yOur teaM

Building an agile organisation Continued


in order to become more agile, organisations must be capable of operating profitably in a competitive environment of continuous and unpredictable change. undoubtedly, technology can play an important supporting role. the limiting factor, however, in today’s business environment is not the availability of technology, but its uptake and use.

it appears many organisations are not taking full advantage of technologies available to them for a number of reasons:

perceived inability to keep up with technology■■

insufficient resources to implement technology■■

insufficient understanding of potential applications■■

Skill shortages (inside and outside the organisation)■■

risk aversion.■■

the bottom line is, without the appropriate systems and platforms in place, the potential impact of all other sources of agility is greatly reduced.9

as any part of an organisation’s environment changes, it must be sufficiently flexible to reorganise not only its people, processes and procedures, but equally its systems, to adapt and also take advantage of change. Standardisation, consistency and simplification within core operational components are all cited as important drivers of agility in kpMg’s The Agile Asset Manager report. these factors enable organisations to cost efficiently “scale operational infrastructure up and down with demand, retaining control as the business diversifies and becomes more responsive, either in terms of meeting client needs or responding to unexpected events”.9

Many critical business processes can be standardised through Business process automation, which not only simplifies key business processes, but improves productivity, reduces costs, promotes internal collaboration and manages risk through effective governance – reducing the time business units spend on manual processes, and improving the speed at which they can adapt and respond to change.

While agility may or may not be the primary goal of a technology implementation, increased agility is often the outcome. for example:

a new platform that improves the volume, quality, speed or dissemination of information may be designed to increase cross-selling and ■■

up-selling opportunities, however it may also help the organisation to better monitor and capitalise on customer purchase trends

the creation of an online ordering and automated fulfilment service may be designed to capture a larger share of small purchases, ■■

however the improved logistics may aid in the efficiency of launching new products.

generally speaking, business leaders are fully aware that an investment in technology is essential for the long term success and adaptability of their organisation. in fact, many have devoted significant resources to upgrading their technology, and see successful implementation as a source of competitive advantage.

the role of technology in an agile organisation.

‘We do a fair bit of strategy work trying to understand the consumer better. So we’re acutely aware that unless we do that sort of [technology based] transformation I’m just not going to be able to do what the business wants ... when you can’t do that you go into irrelevance.’



Why organisations are investing in technologyWhen used as an enabler of change, technology can efficiently and cost-effectively support the activities required in and between organisations to continuously meet changing customer needs. Critically for smaller organisations, the cost of doing business online is becoming increasingly accessible for businesses of all sizes. in particular, google, Microsoft and others are forming ‘clouds’ of processing power and storage that the organisation can tap into in a similar way that they tap into utilities such as water and power. ‘There is a growing trend for software firms to use cloud computing solutions to avoid high capital costs of developing all the required functionality on a single system.’ (hajkowicz and Moody, BRW, Anthony Siblin, September 9-15, 2010, p23).10

technology has also helped many organisations enhance their knowledge-sharing processes, improving their use of critical data in order to make better decisions – quickly. in fact, over the past five years, organisations have reported a significant increase in the use of technology to facilitate communication and decision making (81%), the amount of cross-department communication (74%) and product and service innovations (73%).

Businesses are also equipping their sales and support people with smartphones and tablets and other mobile devices so they can continue to make appointments, prepare quotes and place orders whether from the desk or on the road.

for many larger organisations with their maze of systems, technology is increasingly being used to improve connectivity and integration between systems, and subsequently efficiency and productivity across business units. as cooperation is a cornerstone of agility, it’s absolutely necessary as a means of synchronising the many people and business units that play a role in bringing about the actions required to continually adapt to an ever-changing business environment, ensure the organisation remains competitive and make certain customer needs are met.

Other initiatives being progressed include the increased use of outsourcing as a means of reducing business complexity to significantly improve agility and cost flexibility. through outsourcing, critical yet time consuming business functions such as payroll and hr, manual processing is alleviated and managers can spend more time on strategic business activities.

technology can also play a pivotal role in driving employee engagement – a key requirement of an agile manager, with 83% of top performing companies in the aberdeen group’s ‘The Performance / Engagement Equation’ research directly attributing positive changes in revenue to increased engagement.20

Self-service: empowering employees

through implementing a system which offers an online self-service workbench, employees gain 24/7 online access from work, home, or while travelling. employees are empowered with instant access to, and the ability to take control. as identified in the aberdeen group’s ‘Time and Attendance Strategies’ research, the key differentiator of, their personal information such as leave requests and time keeping setting top performing companies apart from all others lies in their ability to provide employees and managers real-time access to time and attendance tools via self-service and mobile devices.20

‘We’re trying to put the technology to the frontline so the frontline can make decisions faster than anybody.’



The use of Technology to facilitatecommunication and decision making

within the oganisation

The amount of communication with stafffrom other departments and specialties

Product and service innovations


0% 20% 40% 60% 80% 100%

38%

25%

22% 22% 5% 1%51%

49% 18% 7% 1%

43% 16% 2 1%

the role of technology in an agile organisation Continued


through Self Service platforms, employees can also manage their career development, tracking or completing performance assessments, in addition to assessing their suitability for other internal opportunities. Based on the data gathered, technology can then start to instantly identify skill gaps which are critical to ensuring an organisation is well positioned to survive change.

the impact of social mediaintranets, blogs and social media can strengthen interpersonal communications by encouraging new patterns of relationships within organisations. these communication channels prove valuable tools for solving problems or taking advantage of opportunities without restrictions imposed by time, distance and incompatible infrastructures. furthermore, organisations can reorganise and reconfigure human and technical systems as needed to take advantage of change without the need to make major changes in the underlying telecommunications infrastructure that links human systems.21

the majority (83%) of respondents believe social media will impact their organisation over the next 2 years.

While most (57%) organisations have strategies in place to manage the use of social media, the most common strategies are related to the public image of the organisation, providing an opportunity to understand and adapt to changing customer needs.

Whether technology is adopted internally, externally or both – the reality is, organisations that fail to adopt new technology risk becoming irrelevant in a fast moving environment.

Not at all

Don’t know

Only on some departments

Some impact on entire organisation

Large impact on entire organisation

12%

5%

38%

10%

36%

1. does your organisation have access to the appropriate resources in order to keep up with technology?

2. do you have an effective partnership with a technology provider, allowing you to efficiently implement new technology?

3. is the technology that you have in place flexible enough to scale up and down to meet changing business needs, in a cost efficient manner?

4. does your organisation have the technology in place to provide managers with transparency across the whole workforce, allowing them to actively capture specific intelligence via data analytics?

5. does your organisation have the required skills to not only capture, but to use data to make better decisions - quickly?

teChNOLOgy tO SuppOrt agiLity


the research for this Workplace Barometer was conducted for Chandler Macleod by Longergan research during September 2011. the methodology comprised a combination of in depth interviews and online surveys, with responses gained across a range of industry and organisation sizes.

in depth interview participants were senior managers in retail, resources, marketing and advertising, banking and financial services, and human resource industries.

responses to the online survey were collected from 322 CeOs, senior managers and line managers, with a high proportion of response rates received from manufacturing, mining and energy, supply chain and procurement, engineering and technical, and sales and marketing sectors.

about the research.

Manufacturing

Mining & Energy

Supply Chain & Procurement

Engineering & Technical

Sales & Marketing

Government

Human Resources

Banking & Financial Services

Healthcare

Retail

Technology

Accounting & Finance

Business Support & Call Ctr

Non Profit

Education

Telecommunications

Other

0% 5% 10% 15% 20%

20%

17%

10%

7%

6%

5%

4%

4%

4%

3%

3%

3%

2%

1%

1%

1%

12%


there was an even split of responses between organisations with more than 500 people, compared to those with fewer than 500 employees (50% > than 500; 20% 50-199 people).

respondents were primarily in management positions, but responses were also received from non management positions: 29% senior management; 17% hr management; 49% other management; 5% non management.

Secondary research sources1 Powell, J & Clarry, M, Q and A: Creating a More Agile Organization, www.tdwi.org, June 2010

2 Shafer, R.A., 2010 quoted in HR Magazine (Vol 44, No.11)

3 Boston Consulting Group, Creating People Advantage 2010: How companies can adapt their HR Practices for Volatile Times, September 2010

4 Tan, A, Private Sector shows resilience, BRW, August 25-September 28 2011

5 Cross, S, Are you Agile enough for an upturn?, www.cbsnews.com, 24 March 2009

6 Sull, D, How to thrive in turbulent markets, Harvard Business Review, February 2009

7 Sull, D, Competing through organizational agility, www.europeanbusinessreview.com, January 2010

8 Boston Consulting Group & CIETT, Adapting to Change: How private employment services facilitate adaption to change, better labour markets and decent work, October 2011

9 Griffin, N, Smith, I & Luscombe, L, The Agile Asset Manager 2011.

10 Siblin, A, 10 Sectors ready to rocket, BRW, September 9-15, 2010

11 Economist Intelligence Unit, Organisational agility: How business can survive and thrive in turbulent times, www.emc.com, 2009

12 Schwab, K, The Global Competitiveness Report 2011-2012, World Economic Forum, 2011

13 Wong, A, Australia’s skills training needs sharpening for the digital age, The Australian, 17 May 2011

14 McKinsey Quarterly, Building a nimble organization: A McKinsey Global Survey, www.mckinseyquarterly.com, July 2006

15 AGSM Executive Programs, Strategic Thinking: How to Zoom in on the Big Picture, The Leader, September/October/November 2011

16 Samson, D & Draft, R, Management, Second Pacific Rim Edition, 2005

17 Lombardi, M, The Engagement/Performance Equation, Aberdeen Group, 2011

18 Version One, The State of Agile Development, 2008

19 Accenture, Building the Anatomy for High Performance, 2011

20 Aberdeen Group, Time and Attendance Strategies, 2011

21 Arkansas Tech University, Internet technology: contributing to agility in the twenty-first century, 1999

0% 20% 40% 60% 80% 100%

200 - 499More than 500 people 50 - 199 10 - 49 Less than 9 people

16%50% 2%20% 12%

0% 20% 40% 60% 80% 100%

4 - 5 yrs6 years or more

Senior Management

HR Management

Other Management

Non-Management

2 - 3 yrs 1 yr - 1 yr 11 months Less than 1 year

19%45% 10%13% 13%

29%

5%

49%

17%


as one of the region’s largest workforce advisory and management companies, we have a proven track record of unleashing potential of people and companies.

founded in 1959, Chandler Macleod was built on the psychological assessment of employees and candidates, to ensure the best possible people were sourced, assessed and developed. it’s this philosophy that has led us to become one of australasia’s leading workforce advisory and management companies. Our approach and systems provide organisations with employees that are safer, better trained and best suited to the organisational culture in which they are working.

at the core of our organisation is a formula that has not only stood the test of time, but it is even more applicable in today’s workplace where generational pressures and complexity abound. the formula is:

Behaviour = fn (personality • environment)

put simply, a person’s behaviour is a function of who they are, their skills and their temperament combined with the environment in which they work. the environment includes elements such as the job they do, the complexity and scope of the role and the climate and culture of the organisation. With this deep level of understanding of people and organisations, we have diversified to provide recruitment, Consulting and Workforce Management services to some of the largest companies and organisations in the region.

With a footprint of over 60 branches across australia and New zealand, we offer clients the reach they need whether sourcing new talent, managing their existing workforce or assessing and developing their company leaders and culture.

Our team of over 1000 full-time employees has a successful history of partnering with our clients to deliver value and innovation for their human resources needs, goals and strategies.

in 2011, Chandler Macleod group acquired ross human directions, extending the breadth and depth of our offering in recruitment, managed services (BpO, rpO, hrO), human resource information Systems and payrolling (aurion). and through the acquisition of inspire Search and Selection and advanced Career indonesia, also in 2011, we have expanded our geographic coverage in asia to incorporate hong kong, Singapore and indonesia.

unleash the potential of your business with chandler macleod.

Chandler Macleod truly believes in the power of people.

Listed on aSx: CMg

Over 1000 fulltime employees■■

60 branches across region■■

Over 18,000 casual staff on client sites each week■■

650,000 assessments in last five years■■

Over 290,000 people managed under aurion payroll system■■

Outstanding workplace safety record■■

deep understanding of industrial relations■■

Working with over 60% of aSx tOp 100 companies■■

Leaders in talent assessment and organisational and leadership development■■

providers of flexible workforce solutions■■

chANdLeR mAcLeOd QuIck fAcTS


We focus on sourcing, assessing and developing talent across every level of the workforce, with specialist services and consultants who know your industry and requirements inside and out. Combined with our ability to manage workforces of all sizes, Chandler Macleod’s approach provides clients with an effective and accountable way in which to unleash their people and their organisation.

By focusing on these four areas, we’re able to help organisations align every part of their ‘people strategy’. Our expertise ensures that the right people are doing the right things for the right reasons. the end result is a safer, more efficient and more productive workplace.

having over 50 years experience and a network of branches puts Chandler Macleod in a unique position to understand the nuances of the australian business landscape. We are not only actively involved in local communities, but we have a large and extensive database of local talent that we can quickly mobilise to fulfill client needs. plus, by utilising our Bestfit™ recruitment methodology, we can deliver maximum staff retention and increase productivity, therefore reducing staff churn and employment costs.

the equation we work to is simple:

it’s a simple model that we’ve implemented in numerous organisations to help them realise substantial commercial gains and improve their competitiveness.

Productivity + Risk = Profitability

SOURCE

ASSESS

DEVELOP

MANAGE

Chandler Macleod group Limitedwww.chandlermacleod.comaBN: 33 090 555 052

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